Effective management controls and reporting policies for the multinational company;

Page 1

Effective Management Controls and Reporting Policies for the Multinational Company
by ROBERT S. GORAB Partner, New York Office
Presented before Corporate Seminars, Inc., New York—November 1970
MANAGEMENT INFORMATION SYSTEMS (MIS) are essentially com-munication systems. One of the major problems confronting most companies today is the maintenance of sound communications, partic­ularly
in the financial area—getting the required information to the proper people at the proper time.
The world is shrinking, and with that development comes an in­crease
in information need and a decrease in the time within which to respond or react to it. This problem, from an international point of view, is compounded by differences in accounting practices, reporting tech­niques,
disclosure requirements, and language. At one time or another, the lack of such information can cause costly delays or result in an in­ability
to respond to changes in economic or competitive conditions.
Most observers agree that there is a need for better management in­formation
and better decision-making data. Therefore, some of the con­cepts
of MIS can be of benefit to companies, so long as they recognize that there are problems in applying MIS on an international basis.
Obtaining the data a company needs for decision-making at its head offices requires several things, including: greater specification of those needs; greater standardization of reporting practices; the establishment of more current and more easily understood instructions; more uniformity in data recording and reporting; more centralization of control over ac­counting
and financial policy-making decisions; greater recognition of the ways of overcoming deficiencies; and, lastly, recognition of the lim­itations
of foreign manpower and of the effect of rising nationalism.
MIS FOR THE INTERNATIONAL COMPANY
The term MIS is admittedly vague and one very much misunder­stood.
Moreover, while it is a desirable management tool, there are limi­tations
to adopting it for international companies. For companies operat­ing
in an international environment, it is not always possible to develop
390